BioTelemetry, Inc. (Nasdaq:BEAT), the leading wireless medical
technology company focused on the delivery of health information to
improve quality of life and reduce cost of care, today reported
results for the third quarter ended September 30, 2013.
Operational Highlights:
- 18% revenue growth as compared to the third quarter of
2012
- Achieved profitability on an adjusted basis for the second
consecutive quarter
- Generated positive adjusted EBITDA of $3.6 million, the highest
quarterly EBITDA in four years
- Reduced consolidated DSO to 51 days, a 10 day improvement
compared to year end 2012
- $21.0 million in cash and no debt as of September 30, 2013
- Signed exclusive agreement to service Kaiser Permanente
covering 6 million lives
- Received FDA clearance of CardioKey, a low cost 14 day
Holter
- Finalized the holding company structure as BioTelemetry, Inc.,
effective August 1, 2013
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
BioTelemetry, commented: "We are extremely pleased that our first
quarter as BioTelemetry, Inc. was a successful one. We posted an
18% increase in revenue to $32 million which produced $3.6 million
of adjusted EBITDA, up $3.3 million over the third quarter of 2012.
These results were largely due to strong volume growth in our
patient services segment as a result of the United Healthcare
agreement as well as our newly launched MCOTos 2:1 and wireless
event products. Also contributing was increased revenue from our
research services segment driven by the acquisition of Cardiocore
which was acquired a year ago on August 31, 2012.
"I am also pleased to announce two significant achievements for
the company. The first is an exclusive three year agreement with
KPS Select, Inc., to provide ambulatory remote monitoring services
to the Kaiser Foundation Hospitals and Permanente Medical groups'
six million members. The second is the FDA clearance of CardioKey,
a new low cost 14-day Holter we plan to launch in the near future
in a patch format. We expect this system to substantially reduce
the time and cost of processing a long term Holter.
"The quarter was filled with many accomplishments as we
established our new corporate structure, increased our patient
services volume, posted solid financials, signed a contract to
service Kaiser Permanente, received FDA approval of CardioKey and
improved our balance sheet. The business clearly has excellent
momentum and we expect to continue to fuel growth through the
disciplined execution of our strategic plan."
Third Quarter Financial Results
Revenue for the third quarter 2013 was $31.9 million, an
increase of 17.9% compared to $27.0 million in the third quarter
2012. Revenue increased $4.9 million primarily due to an increase
in research services of $3.8 million with the acquisition of
Cardiocore in August 2012. Additionally, patient services revenue
increased $1.0 million mainly due to an increase in overall patient
volume. For the three months ended September 30, 2013, patient
revenue was comprised of 47% Medicare and 53% commercial.
Gross profit for the third quarter 2013 increased to $19.2
million, or 60.3% of revenue, compared to $16.4 million, or 60.6%
of revenue, in the third quarter of 2012. Gross profit for the
third quarter 2013 on an adjusted basis was $19.4 million, or 61.0%
of revenue, excluding $0.2 million related to restructuring and
other nonrecurring charges. This compares to gross profit for the
third quarter 2012 on an adjusted basis of $16.6 million, or 61.5%
of revenue, excluding $0.2 million related to restructuring and
other nonrecurring charges. The decrease in the gross profit
percentage was related to the growth in the lower margin research
services segment.
On a GAAP basis, operating expenses for the third quarter 2013
were $22.1 million, an increase of 13.0% compared to $19.5 million
in the third quarter 2012. On an adjusted basis, operating expenses
for the third quarter were $19.0 million, a 2.3% increase compared
to $18.6 million for the prior year quarter, excluding $3.1 million
in the third quarter 2013 and $0.9 million in the third quarter
2012 related to restructuring and other nonrecurring
charges. The increase in operating expense was driven by the
addition of the Cardiocore operations as well as an increase in
development costs for our next generation device and was partially
offset by a reduction in bad debt expense.
On a GAAP basis, net loss for the third quarter 2013 was $3.0
million, or a loss of $0.12 per diluted share, compared to a net
loss of $3.1 million, or a loss of $0.12 per diluted share, for the
third quarter 2012. Excluding expenses related to
restructuring and other nonrecurring charges, adjusted net income
for the third quarter 2013 was $0.3 million, or a positive $0.01
per diluted share. This compares to an adjusted net loss of
$1.9 million, or a loss of $0.08 per diluted share, for the third
quarter 2012, which excludes the impact of restructuring and other
nonrecurring charges.
Liquidity
As of September 30, 2013, total cash was $21.0 million, an
increase of $1.7 million compared to the second quarter 2013 and
$2.7 million compared to year end 2012. The significant cash
uses during the third quarter 2013 included $1.4 million for
capital expenditures, primarily medical devices and
software. Positive operating cash flow of $2.9 million helped
to offset these expenditures. In addition, consolidated DSO
decreased to 51 days, representing a two day decrease compared to
the second quarter 2013 and a ten day decrease compared to year end
2012.
Conference
Call
BioTelemetry, Inc. will host an earnings conference call on
Tuesday, November 5, 2013, at 5:00 PM Eastern Time. The call
will be simultaneously webcast on the investor information page of
our website, www.biotelinc.com. The call will be archived on our
website for two weeks.
About BioTelemetry
BioTelemetry, Inc., formerly known as CardioNet, Inc., is the
leading wireless medical technology company focused on the delivery
of health information to improve quality of life and reduce cost of
care. The Company currently provides cardiac monitoring
services, original equipment manufacturing with a primary focus on
cardiac monitoring devices and centralized cardiac core laboratory
services. More information can be found at
www.biotelinc.com.
Cautionary Statement Regarding Forward-Looking
Statements
This document includes certain forward-looking statements within
the meaning of the "Safe Harbor" provisions of the Private
Securities Litigation Reform Act of 1995 regarding, among other
things, our expectations regarding the effect of the creation of a
new holding company structure and the effect, including on our
growth prospects, of the new holding company structure, the
prospects for our products and our confidence in the Company's
future, as well as our expectations regarding the effect the United
contract will have on the company's operating results. These
statements may be identified by words such as "expect,"
"anticipate," "estimate," "intend," "plan," "believe," "promises"
and other words and terms of similar meaning. Such forward-looking
statements are based on current expectations and involve inherent
risks and uncertainties, including important factors that could
delay, divert, or change any of these expectations, and could cause
actual outcomes and results to differ materially from current
expectations. These factors include, among other things, effects of
changes in health care legislation, effectiveness of our cost
savings initiatives, relationships with our government and
commercial payors, changes to insurance coverage and reimbursement
levels for our products, the success of our sales and marketing
initiatives, our ability to attract and retain talented executive
management and sales personnel, our ability to identify acquisition
candidates, acquire them on attractive terms and integrate their
operations into our business, the commercialization of new
products, market factors, internal research and development
initiatives, partnered research and development initiatives,
competitive product development, changes in governmental
regulations and legislation, the continued consolidation of payors,
acceptance of our new products and services, patent protection,
adverse regulatory action, and litigation success, our ability to
successfully create a new holding company structure and to
anticipate the benefits of such structure. For further
details and a discussion of these and other risks and
uncertainties, please see our public filings with the Securities
and Exchange Commission, including our latest periodic reports on
Form 10-K and 10-Q. We undertake no obligation to publicly update
any forward-looking statement, whether as a result of new
information, future events, or otherwise.
|
Three Months
Ended |
Consolidated Statements of
Operations |
(unaudited) |
(In Thousands, Except Per Share
Amounts) |
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Revenue |
$ 31,874 |
$ 27,040 |
Cost of revenue |
12,640 |
10,642 |
Gross profit |
19,234 |
16,398 |
Gross profit % |
60.3% |
60.6% |
|
|
|
Operating expenses: |
|
|
General and administrative expense |
8,959 |
7,969 |
Sales and marketing expense |
6,708 |
6,476 |
Bad debt expense |
1,427 |
3,195 |
Research and development expense |
1,898 |
1,143 |
Integration, restructuring and other
charges |
3,077 |
741 |
Total operating expenses |
22,069 |
19,524 |
|
|
|
Loss from operations |
(2,835) |
(3,126) |
Interest and other (expense), net |
(97) |
5 |
|
|
|
Loss before income taxes |
(2,932) |
(3,121) |
Benefit (provision) for income taxes |
(24) |
-- |
Net loss |
$ (2,956) |
$ (3,121) |
|
|
|
Loss per Share: |
|
|
Basic |
$ (0.12) |
$ (0.12) |
Diluted |
$ (0.12) |
$ (0.12) |
|
|
|
Weighted Average Shares Outstanding: |
|
|
Basic |
25,616 |
24,995 |
Diluted |
25,616 |
24,995 |
|
|
|
Nine Months
Ended |
Consolidated Statements of
Operations |
(unaudited) |
(In Thousands, Except Per Share
Amounts) |
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Revenue |
$ 96,396 |
$ 81,535 |
Cost of revenue |
38,121 |
32,801 |
Gross profit |
58,275 |
48,734 |
Gross profit % |
60.5% |
59.8% |
|
|
|
Operating expenses: |
|
|
General and administrative expense |
27,564 |
24,276 |
Sales and marketing expense |
19,737 |
18,655 |
Bad debt expense |
5,861 |
9,066 |
Research and development expense |
5,400 |
3,368 |
Integration, restructuring and other
charges |
6,820 |
1,744 |
Total operating expenses |
65,382 |
57,109 |
|
|
|
Loss from operations |
(7,107) |
(8,375) |
Interest and other (expense), net |
(211) |
91 |
|
|
|
Loss before income taxes |
(7,318) |
(8,284) |
Benefit (provision) for income taxes |
(24) |
431 |
Net loss |
$ (7,342) |
$ (7,853) |
|
|
|
Loss per Share: |
|
|
Basic |
$ (0.29) |
$ (0.32) |
Diluted |
$ (0.29) |
$ (0.32) |
|
|
|
Weighted Average Shares Outstanding: |
|
|
Basic |
25,450 |
24,840 |
Diluted |
25,450 |
24,840 |
|
|
|
Summary Financial Data |
|
|
(In Thousands) |
|
|
|
September 30, |
December 31, |
|
2013 |
2012 |
|
(unaudited) |
(unaudited) |
|
|
|
Cash and investments |
$ 21,020 |
$ 18,298 |
Patient accounts receivable, net |
11,894 |
13,792 |
Other accounts receivable, net |
6,312 |
6,515 |
Days sales outstanding |
51 |
61 |
Working capital |
24,819 |
24,932 |
Total assets |
88,680 |
90,010 |
Total debt |
-- |
-- |
Total shareholders' equity |
65,745 |
69,998 |
|
Reconciliation of Non-GAAP
Financial Measures |
(In Thousands, Except Per Share
Amounts) |
|
|
|
In accordance with Regulation G
of the Securities and Exchange Commission, the table set forth
below reconciles certain financial measures used in this press
release that were not calculated in accordance with generally
accepted accounting principles, or GAAP, with the most directly
comparable financial measure calculated in accordance with
GAAP. |
|
|
|
|
Three Months
Ended |
|
|
|
|
(unaudited) |
|
September 30, |
September 30, |
|
2013 |
2012 |
Operating loss – GAAP |
$ (2,835) |
$ (3,126) |
Nonrecurring charges (a) |
3,295 |
1,190 |
Adjusted operating income
(loss) |
$460 |
$ (1,936) |
|
|
|
Net loss – GAAP |
$ (2,956) |
$ (3,121) |
Nonrecurring charges (net of income tax
benefit of $0 and $0, respectively) (a) |
3,295 |
1,190 |
Adjusted net income
(loss) |
$ 339 |
$ (1,931) |
|
|
|
Loss per diluted share – GAAP |
$ (0.12) |
$ (0.12) |
Nonrecurring charges per share (a) |
0.13 |
0.04 |
Adjusted earnings (loss) per diluted
share (b) |
$ 0.01 |
$ (0.08) |
|
|
|
(a) In the third quarter of
2013, the Company incurred $3.1 million related to restructuring
and other nonrecurring charges primarily due to legal fees related
to litigation, employee related costs for restructuring and
integration and asset impairment charges, as well as $0.2 million
for other nonrecurring charges. In the third quarter of 2012,
the Company incurred $0.7 million related to integration,
restructuring and other charges, $0.3 million of other nonrecurring
expenses primarily related to the San Francisco monitoring center
and $0.1 million for the forfeiture and acceleration of certain
options. |
|
|
|
(b) Due to the Company reporting
positive adjusted net income for the third quarter, the Company
used the weighted average diluted shares outstanding as of the end
of the third quarter in the earnings per share
calculation. The diluted share count used was 27.6
million. |
|
|
|
|
Three
Months Ended |
|
(unaudited) |
|
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Cash provided (used) by operating
activities |
$ 2,882 |
$ 7,478 |
Capital expenditures |
(1,438) |
(1,608) |
Free cash flow |
$ 1,444 |
$ 5,870 |
|
|
|
|
Three
Months Ended |
|
(unaudited) |
|
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Operating loss – GAAP |
$ (2,835) |
$ (3,126) |
Nonrecurring charges |
3,295 |
1,190 |
Depreciation and amortization expense |
3,169 |
2,210 |
Adjusted EBITDA |
$ 3,629 |
$ 274 |
|
Reconciliation of Non-GAAP
Financial Measures |
(In Thousands, Except Per Share
Amounts) |
|
|
|
In accordance with Regulation G
of the Securities and Exchange Commission, the table set forth
below reconciles certain financial measures used in this press
release that were not calculated in accordance with generally
accepted accounting principles, or GAAP, with the most directly
comparable financial measure calculated in accordance with
GAAP. |
|
|
|
|
Nine Months
Ended |
|
|
|
|
(unaudited) |
|
September 30, |
September 30, |
|
2013 |
2012 |
Operating loss – GAAP |
$ (7,107) |
$ (8,375) |
Nonrecurring charges (a) |
7,530 |
3,607 |
Adjusted operating income
(loss) |
$ 423 |
$ (4,768) |
|
|
|
Net loss – GAAP |
$ (7,342) |
$ (7,853) |
Nonrecurring charges (net of income tax
benefit of $0 and $431, respectively) (a) |
7,530 |
3,176 |
Adjusted net income
(loss) |
$ 188 |
$ (4,677) |
|
|
|
Loss per diluted share – GAAP |
$ (0.29) |
$ (0.32) |
Nonrecurring charges per share (a) |
0.30 |
0.13 |
Adjusted income (loss) per diluted
share (b) |
$ 0.01 |
$ (0.19) |
|
|
|
(a) In the first nine
months of 2013, the Company incurred $6.8 million related to
restructuring and other nonrecurring charges primarily due to legal
fees related to litigation, employee related costs for
restructuring and integration, and asset impairment charges, and
$0.7 million for other nonrecurring charges and the forfeiture and
acceleration of certain options. In the first nine months of
2012, the Company incurred $1.7 million related to integration,
restructuring and other charges, $1.4 million of other nonrecurring
charges primarily related to San Francisco monitoring center and
legal fees related to litigation, and $0.5 million for the
forfeiture and acceleration of certain options. |
|
|
|
(b) Due to the Company
reporting positive adjusted net income for the nine months ended
September 30, 2013, the Company used the weighted average diluted
shares outstanding as of the end of the nine months in the earnings
per share calculation. The diluted share count used was 26.5
million. |
|
|
|
|
Nine Months
Ended |
|
(unaudited) |
|
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Cash provided (used) by operating
activities |
$ 7,044 |
$ 3,614 |
Capital expenditures |
(4,863) |
(4,357) |
Free cash flow |
$ 2,181 |
$ (743) |
|
|
|
Nine Months
Ended |
|
(unaudited) |
|
|
|
|
September 30, |
September 30, |
|
2013 |
2012 |
|
|
|
Operating loss – GAAP |
$ (7,107) |
$ (8,375) |
Nonrecurring charges |
7,530 |
3,607 |
Depreciation and amortization expense |
8,913 |
6,341 |
Adjusted EBITDA |
$ 9,336 |
$ 1,573 |
CONTACT: BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@cardionet.com
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